Make no mistake about it, the so-called gig economy is on the rise. A recent study found that the freelance work has increased by 27% during the last 20 years, according to CNBC.

Experts say that it’s tricky to quantify because there are no government statistics available. Nevertheless, Mark Muro, a fellow at the Metropolitan Policy Program, said, “I think you have a picture here of a potentially seismic reorganization.” Organizations like Airbnb, Upwork, Taskrabbit, Uber, and Lyft are leading the way in employing freelance workers.

And it’s not just providing rides and renting out rooms. The Bureau of Labor Statistics reports that on-demand work is increasingly relevant in other occupations, from arts and design to construction to media.

Why Companies Are Hiring Freelancers

For most companies, hiring and retaining quality employees will remain foundational to success. But in today’s economy, hiring gig workers for individual jobs makes sense. With industries rapidly developing, hiring gig workers to fill in will make your business more flexible and adaptable. For example, during a particularly busy season, you can bring in gig workers to fill the gaps.

Many freelancers are experts in their particular fields. They can help your business handle specific, short-term situations. Freelancers are also more affordable. Employers don’t need to cover health care, retirement plans, or other benefits. Organizations can hire gig workers only as they need them and only at the rates they feel comfortable offering.

Why Workers Are Moving Toward Freelance

The growth of freelancing isn’t just good for employers — it’s better for some workers as well. Those who have considerable family responsibilities, for example, may be unable to work full time. The flexibility of being able to work when you want is valuable. Many freelancers are also permitted to work where and how they want as long as they have access to the tools the job requires.

Gig workers also have the freedom to accept or reject jobs for any reason. If the job doesn’t pay enough, requires too much commitment, or interferes with their schedule, they can turn it down. Plus, with many companies reporting massive layoffs, freelancing allows workers to avoid being financially dependent on a single employer.

The Challenges of On-Demand Worker Engagement

That said, companies need to do more to increase on-demand worker satisfaction. Our research shows that freelance workers are less satisfied when compared to full-time employees in a number of metrics. Disturbingly, they:

Are 15% less happy at work

Feel 19% less valued

Are 23% less likely to recommend their company’s services

It’s not sustainable for organizations to overlook the needs of a significant faction of their human resources. With the continued growth in on-demand workers, it’s critical that organizations develop best practices for working with freelancers to get the most out of this rising workforce. Read What Leaders Need to Know About Remote Workers to discover what you can do.